20000314

Indian rupee

BOMBAY: Indian rupee ended slightly firmer on Monday amid good dollar supplies bunched up over the weekend, dealers said.

The Indian rupee closed at 43.57/58 per dollar against on Friday's close of 43.5775/5825 and compared with the opening levels of 43.575/585.

"There was some demand for dollars by an oil company mainly to prepay its loan obligation. Apart from that, dollar buying was light," a dealer in a state-run bank said. Dealers said a financial services firm along with a few state-run banks were also bidding for dollars.

"However dollar supplies took care of the demand," a dealer at a large foreign bank said.

Foreign funds were net buyers of equity over $42 million on Thursday, data released by the Securities and Exchange Board of India showed.

Net investment in equities by foreign funds so far in March was over $100 million. In February net investments stood at $619.8 million.

Dealers said near-term forward premia tracked call rates intially in the morning but firmed up during the day as bond prices fell.

"With bonds weakening and the market not expecting a loowering of interest rates till April, there was some inter-bank paying," a dealer at a foreign bank said.

A dealer at a state-run bank said there was some corporate paying in the forward market.

The six-month premium ended at an annualised 3.45 percent on Monday compared to 3.20 percent on Friday. It had opened at 3.26 percent. -Reuters

Chinese yuan

SHANGHAI: China's yuan closed slightly higher against the dollar on Monday, buoyed by China's healthy foreign trade data for the first two months of this year.

The yuan ended at 8.2780 to one US dollar from 8.2783 on Friday after moving in a narrow range of 8.2777 and 8.2785.

China's exports surged a year-on-year 41.2 percent in the first two months of this year to $31.57 billion, while imports soared 54.2 percent to $28.69 billion, foreign trade minister Shi Guangsheng said on Monday.

China earned a trade surplus of $2.89 billion in January and February, down from $3.77 billion in the same period of last year, Shi said in a statement.

"Bank traders believed the trade data in general were positive as they showed a continued improvement in China's exports, which started in the second half of last year," a local bank dealer said.

But dealers said the trade data also indicated a continuation of last year's trend in which imports were growing faster than exports, reducing China's trade surplus.

A falling trade surplus would greatly affect dollar supply on the Shanghai-based foreign exchange market because the surplus was the key source for the supply as China's yuan was not convertible on current accounts, they said.

With the positive impact of an improvement in exports offset by a falling trade surplus, the yuan was likely to move narrowly between 8.2780 and 8.2790 in the near term, dealers said.

The yuan closed lower against the Japanese yen at 7.8200 to 100 yen from 7.7680 on Friday. It ended little changed against the Hong Kong dollar at 1.0630 to HK$1.0 from 1.0631. -Reuters

S.Korean won

SEOUL: The South Korean won ended slightly weaker against the dollar on Monday as players believed a trade deficit in early March could prompt monetary authorities to step up dollar-buying intervention, dealers said.

Dollar demand for remittances by one local bank, estimated at about $50 million, also helped the greenback, they said.

Helping cap the dollar's rise in the Korean currency market was the yen's strength versus the greenback, dealers said.

The won closed at 1,120.4 per dollar against Friday's close of 1,119.7.

It opened at 1,120.5 and ranged between 1,119.0 and 1,121.8.

A Ministry of Finance and Economy official said Korea posted a trade deficit of $1.350 billion in the first 10 days of March, far larger than the $405 million deficit in the same period a year earlier. "Concern about intervention stemming from the trade deficit was a factor for the won's fall," said a local bank dealer said. "But the effect was offset by the yen's rise against the dollar. As a result, trading was tightly ranged and thin."

The yen was quoted at 105.71/81 per dollar JPY at 0800 GMT, against 106.27/30 late in Tokyo on Friday.

Dealers forecast the dollar/won rate would move from 1,117 to 1,122 on Tuesday in the absence of fresh factors.

Pressure on the won eased as foreign investors sold a net 33 billion won of Korean stocks on Monday, against a net buying of 82.4 billion won on Friday., they said. Foreign fund inflows have caused considerable appreciation of the local currency.Dealers said the won remained set to appreciate in the long term, however, given the forecast of a $12 billion trade surplus this year on top of a $25.5 billion surplus in 1999.

"At the moment, trading patterns suggest trade will stay to tight ranges are likely to continue for the time being as it is hard to find incentives for trading," said a foreign bank dealer.

In the non-deliverable forward market, the six-month won was quoted at 1,122.5/24.0 against 1,121.0/22.5 late on Friday. The one-year won was at 1,125.0/26.5 against 1,124.5/26.5. -Reuters

Philippine peso

MANILA: The Philippine peso ended firmer on Monday although it was off its day-high as local corporates bought dollars below the 40.85 level, dealers said.

The local unit ended at 40.865 from the close of 40.89 on Friday. It ranged from 40.83 to 40.88. Turnover was thin at $138 million from the previous $206.8 million.

"There was a lot of corporate (dollar) buying when it reached 40.83 so we returned to above 40.85, but demand was weak again at that level," a dealer at a foreign bank said. The peso's early strength was boosted by the success of the launch on Friday of the Philippines' $1.6 billion bond offering, of which $1.2 billion was new money, dealers said.

Dealers said Monday's trading volume was thin because corporates were waiting for the peso to further appreciate, while banks opted to maintain long dollar positions.

"There are local scenarios that surprise the market once in a while so banks are staying with the safer currency," a dealer with another foreign bank said.

Dealers said banks would also likely keep square to slightly long dollar positions at least until the US Federal Reserve announces an expected rate hike last this month.

But dealers said an upside for the peso was more likely, because of some expected equity investments, and the long dollar position of most banks.

"I'm expecting banks to take profits after the Fed announcement," one dealer said.

Dealers expect said the peso would range from 40.80 to 40.90 on Tuesday, with the upside more likely. Its major resistance was placed at 40.75. -Reuters

Indonesia rupiah

JAKARTA: Indonesia's rupiah eased in late trade on Monday amid an increase in commercial demand for dollars ahead of the end of the fiscal year.

Traders also saw a slight rise in offshore demand for dollars amid slightly weaker regional currencies despite the yen's continued strength.

The rupiah had weakened to 7,420/7,435 to the dollar from 7,388/7,398 in early trade.

Traders cautioned the rupiah could go down to 7,475 if the 7,420 resistance level was broken, but doubted it would break through the 7,500 psychological level.

They said the rupiah could recover after March, and after the government completes the sale of its 40 percent stake in auto giant PT Astra International, due to be finished by the end of the month.

"Corporate demand for dollars seems to be increasing ahead of the end of March, which is usually the time to repay debts and pay taxes," said a foreign bank dealer.

Many traders said the rupiah's long-term outlook remained steady amid hopes of continued economic recovery.

Bank Indonesia said 8.68 trillion rupiah in funds matured early on Monday. Overnight rates still hovered at 9.25 percent for foreign banks and 9.5 percent for local banks.

Bank Indonesia said last week it saw no need to increase domestic interest rates despite the global trend of rising interest rates due to further possible US interest rates hikes. But the bank said it would remain watchful.

The US Federal Reserve's rate-setting committee next meets on March 21 to decide whether to raise borrowing costs. -Reuters